29 February: Borrowers Unfazed by High Interest Rates

Furthermore, Clydesdale’s specialized mortgage offers targeted at recently certified professionals, such as doctors and solicitors, would experience an increase of 0.65 percentage points. Starting from tomorrow (6 March), Principality Building Society will be raising certain fixed rates within its range by a maximum of 0.34 percentage points. The rates for residential remortgages with loan-to-value (LTV) ratios of 90% and 95% are impacted, as well as some buy-to-let options available to new borrowers. The upcoming prices will be revealed tomorrow.

Mortgage consultation at no cost. The latest data from the Bank of England indicates that approvals for home purchase mortgages increased for the fourth consecutive month in January, reaching their highest level in almost a year. The latest Credit and Money Report indicates that the number of approvals increased to 55,227 in January, compared to 51,506 in December 2023. The figures reached their current level in October 2022, over 58,000. The number of approvals for remortgaging, namely for switching to a different lender rather than staying with the current one, stayed consistent at 30,885 in January (compared to 30,917 in December).

However, the current figure surpasses the 25,819 tally documented in January 2023. In January, the average interest rate paid by borrowers on newly issued mortgages decreased by 0.9 percentage points to 5.19%, as reported by the Bank’s data. The current rate is lower than the peak of 5.34% in November of the previous year, which was the highest level since the Bank began tracking average mortgage rates in 2016. According to Mark Harris, a broker with SPF Private Clients, mortgage approvals increased in January due to the combination of lower mortgage rates, which made housing more affordable, and increased confidence among buyers.

In January, the average interest rate for newly issued mortgages decreased. However, towards the end of the month, lenders began increasing their fixed interest rates once more. Alice Haine, an investment consultant at Bestinvest, concurs that there is a noticeable increase in buyer interest. She states, “There is a gradual resurgence of confidence in the housing market, as prices continue to demonstrate resilience.” Jeremy Hunt’s potential announcement of a 99% mortgage program in his upcoming Budget could provide an additional stimulus to the housing market. This policy would assist first-time purchasers, who only have a 1% deposit, in entering the property market.